At twenty-two years old, Donald Trump was living year-round in the big house on Midland Parkway. He and his father commuted every day to a modest office on Avenue Z, where Fred Trump gave Donald impressive titles, naming him director or vice president of corporations that controlled thousands of rental apartments. He paid Donald a salary that would soon reach $100,000 a year and got him a Cadillac. Still, Donald was endlessly bored with the business, which entailed cajoling struggling tenants to pay rent on time, overseeing repairs of tar roofs and boilers, and hiring rental agents and superintendents.
He made his first imprint on the business almost in the shadows. Fred Trump occasionally placed classified advertisements in local newspapers, such as listing job openings or seeking to buy a dump truck and a tractor. The ad didn’t include his name, just his office number—SH 3-4400, under New York’s old exchange system—and his home number in Jamaica Estates—AX 7-7348.
In July 1968, just as Donald began working full-time at his father’s office, a new ad ran in The New York Times seeking tenants for retail space—“Emphasis on BUTCHER, BAKER, CARD STORE”—at a building in Brooklyn. It listed a new contact: “Call MR. BARON SH 3-4400. SUNDAY. CALL AX 7-7348.”
Donald Trump had coined a pseudonym for himself. The ads that directed interested parties to call this Mr. Baron—sometimes spelled “Barron”—showed up with increasing frequency. Donald used the name to sell his father’s two-year-old Cadillac limousine—“All extras. Low mileage. Original owner.”—as well as to find a building superintendent and tenants for apartments. He listed his brother Freddy’s prized fishing boat for $32,500, calling the forty-foot boat “luxurious” and “meticulously maintained” with a tower, new twin engines, and tracking equipment.
He would use the name “John Baron” for decades to come, including in calls with reporters to insult foes or flatter himself. Whatever the reason he had for creating an alter ego, the young Donald Trump was clearly restless on Avenue Z.
In college he had contemplated a movie career and took half a step in that direction one afternoon in 1969, leaving the outer boroughs in the back of a chauffeured car for Manhattan. He rolled past the peep shows and pornographic film houses that crowded Times Square to the Palace Theatre, where David Black, a Broadway producer whose most recent play had just won a Tony Award, kept an office. Donald arrived without an appointment and dressed to the nines. He invited Black to lunch. He had a pitch to make, hoping that a taste of his father’s money would buy him entry into a brighter life than he had found in Brooklyn.
The two men rode in Donald’s limousine through Central Park to the Metropolitan Club, a formal members-only association that had been founded by J. P. Morgan in 1891 for newly rich titans of finance. The interior of the stately clubhouse on Fifth Avenue, in the heart of Manhattan’s old-money Upper East Side, had been designed by a Parisian firm in the French baroque style, with elaborate ceiling paintings, golden relief panels, and red-velvet curtains.
David Black had spent his forty years toggling between art and commerce. He played violin as a boy, graduated from Harvard, worked as an opera singer, made a fortune selling mutual funds, then used that wealth to produce Broadway plays. With his bald head, glasses, and soft middle, he looked more the part of a workaholic banker than a raconteur, but he spent weekends competing in grueling cross-country equestrian jumping events. At that moment, Black had two shows nearing debut: Salvation, a modern rock and roll musical featuring a young Bette Midler; and Paris Is Out!, a light comedy about an older Jewish couple planning a European vacation.
Though Donald dreamed with the intensity of a young man, in restaurants and culture his tastes shuffled along with an older generation. As the two men dined in an ornate room of the Metropolitan Club, Donald said he had read about Black and Paris Is Out! in Variety. He hoped to try his hand as a Broadway producer. He asked Black to let him put up the money to coproduce the show. He peppered Black with questions about the business side of Broadway, asking how many performances it would take before he started making a profit. “He had done his homework, and that was unusual,” Black later recalled. By the end of lunch, Black agreed to list Trump as a coproducer in exchange for an investment of $70,000, half the cost of the play. Donald put up the cash, the equivalent today of more than half a million dollars. The money came from Fred Trump, but Donald’s name would appear on the marquee and inside the Playbill passed out to audience members.
To Black and the play’s author, Richard Seff, Donald seemed earnestly interested in the show’s success. He never meddled in the artistic side of the production. He showed up for early performances, watching from the back of the room, fretting over things like the placement of posters outside and why stagehands who only raised and lowered the curtain were paid for a full shift.
The show starred two stage veterans, Molly Picon, who gained fame in Yiddish theater and silent movies, and Sam Levene, a Russian-born star of stage and screen who grew up the son of a Jewish cantor on the Lower East Side of Manhattan. Black saw his play as a sentimental throwback, and opening night at the Brooks Atkinson Theatre arrived like a dispatch from a bygone era. Directly across the street at the Biltmore Theatre, the groundbreaking rock musical Hair—with its psychedelic anthem “Aquarius” and celebration of hippie counterculture and onstage nudity—was in the middle of a long and successful run.
Black expected most critics to hate the play, but hoped audiences might like it. He tried to protect the show’s chances by staggering tickets for critics over the first few weeks. It did not work. Instead of a one-day tidal wave, negative reviews trickled out every few days: the Times called it “Trivial and silly”; “Embarrassingly bad,” said Newsday; and Variety’s critic found it to be “Innocuous, if not entirely pointless.”
The show closed in April 1970, after a run of about one hundred shows. Donald lost all of his father’s money. The Playbill for Paris Is Out! noted that Black and Donald planned to coproduce a second show together. But Donald dropped out. Black suggested he stick to the family real estate business.
Not long after his play failed, Donald moved out of the family house in Jamaica Estates. Much as his father had seen promise of a better life in the mansions of nineteenth-century builders, Donald looked across the bridge to the titans of finance and industry, and their heirs, in uptown Manhattan. He took a small apartment on the seventeenth floor of a plain white-brick building on the Upper East Side, at Third Avenue and East Seventy-Fifth Street. Each morning, he left Manhattan for a twenty-mile reverse commute in his company Cadillac.
Even as they worked shoulder to shoulder, Donald began to erase his father from the company’s public profile. For at least a decade, his father had referred to his company in news releases and advertisements as “the Fred Trump Organization.” Donald rebranded the company as simply “The Trump Organization” and placed classified ads seeking to buy properties. The ads requested that financial details be sent to his attention—using his real name, not Mr. Baron—at the Beach Haven office. “All cash!” the ads screamed. It would be his father’s cash, but Donald would make it increasingly clear that he was the Trump in the company name. His father would never object.
Fred still controlled the direction of the business, but he was more focused on protecting his wealth than taking risks to multiply it. He still occasionally bought existing buildings, including a two-hundred-unit apartment project in Queens, the sort of six-story brick shoebox that felt familiar. Taylor Johnson Jr., Freddy’s friend and the son of Fred’s buddy in Virginia, also helped Fred buy two towers overlooking the water in the Norfolk area.
Fred undertook one new project around this time, the stalled construction of an apartment building for low-income senior citizens in East Orange, New Jersey, about seventeen miles west of Manhattan. The original sponsor, an insurance company, had arranged government financing, commissioned plans, and hired a general contractor. But the insurance company dropped out when it determined the profits wouldn’t be worth the effort. There was very little to do other than put up some cash and pick up where the insurance company had left off. Fred paid $862,752 to take ownership of what was to become an $8 million project.
The modest New Jersey building would mark the first time Fred didn’t dole out his wealth evenly. He gave Donald 25 percent ownership in the new building. His siblings received no part of it.
To win the low-interest government loan, Fred had agreed to limit his profits. As he had with prior projects, he immediately set out to evade that limitation. This time, the excess profits would go to his chosen son.
After the building opened, Fred began paying about $48,000 a year to a company that Donald owned, ostensibly for managing the building. Donald did not have to cover the salaries of workers from that fee; employees on Fred’s payroll did the work.
Once again, the Trumps offered air conditioners for rent to their low-income tenants. Fred let Donald keep that money too. The management job and air-conditioner fees added up. The drab building began annually kicking off for Donald Trump the equivalent of the money he had lost on Broadway the year before.
With Fred not traveling much anymore, his far-flung properties began to languish, and he looked to sell. The first to go was Swifton Village, the large apartment complex in Cincinnati that he had bought from the FHA in 1964 after the original developer failed. A year later, he admitted defeat. “Cincinnati to us is a real disappointment,” he told the Cincinnati Enquirer, adding that the property would always be a money loser. When a potential buyer expressed interest in 1972, Donald traveled to Ohio and gave the buyer a tour. Fred accepted the $6.75 million offer. It was mostly a wash, enough to cover the $6.2 million Fred had paid and invested in renovations and some of his operating losses over the years. But Donald would later make up bigger numbers to embellish the importance of his first deal.
Even in Fred’s personal affairs, he had entered a period of contraction. In 1957, Fred had bought a house one mile from the beach in Westhampton, New York. It had four bedrooms, with a separate building for “servant quarters,” sat on two acres. It was an hour drive from the Trump mansion in Jamaica Estates, a charming getaway just as he and Mary were welcoming grandchildren into their lives. Fred sold it in 1972.
The Trumps’ block on Midland Parkway, with its stately houses and trees, remained unchanged. But a few blocks away, closer to Hillside Avenue, the elegant single-family homes had been replaced with larger apartment buildings. Muggings had grown so common that the neighborhood association had hired its own private security company. Some of the original country-estate features of the neighborhood had been picked away. To the north, the golf course created for residents had become the campus of St. John’s University. The estate of Michael Degnon, the great builder of subway tunnels, had become a Catholic church and school. The north and south sections had been split by the Grand Central Parkway, a six-lane highway.
During his last rush of expansion through the 1960s, Fred Trump had built or bought ten apartment buildings, more than 1,300 units, in Jamaica Estates. Those buildings had become the housing for his children in times of need. Freddy lived alone in one. His wife, Linda, from whom he had separated, lived with their two children in another. Maryanne lived with her son in a third.
Fred had also bought the site once occupied by an emblem of the neighborhood’s early-century grandeur, the Elizabethan lodge at the entrance to Jamaica Estates. At some point over the decades, the grand lodge had been razed. It now served as a parking lot for commuters using the nearby subway stop to Manhattan. Fred proposed building a nineteen-story building on the site, which would require a change in zoning.
In 1973, Donald attended a local community board meeting to promote the plan. A local state senator, Frank Padavan, told Donald that he saw any such proposal as dead on arrival: “I have a basic philosophy about high-rise apartments in Queens—I oppose them. We have exceeded our density limits in every area.” Tenants and politicians, tired of the constant cramming of more bodies into the neighborhood, complained about the potential impact on the sewage system, on the drinking water supply, on already crowded subways and buses and schools.
The proposal failed. The Trumps would eventually lease part of the site to McDonald’s. But unlike the blame Fred cast on Freddy for the failure at Steeplechase, Donald retained his father’s unflinching support.
A fifteen-minute drive from Fred’s office at Beach Haven, the largest apartment construction project in Brooklyn had ground to a halt. United Housing Foundation, Fred’s old foe at Trump Village, which had proposed a project to build six thousand apartments near the Shore Parkway and Jamaica Bay, hadn’t been able to win approval for new streets and schools. The yearslong process caused such an increase in costs that United Housing backed out. The future of the project, known as Twin Pines, was in doubt.
Fred, a devoted reader of the real estate news in the city’s newspapers, no doubt knew every turn the project had taken. It was the sort of project he might once have waged war to take over. But now that Fred was in his sixties, his days of taking off his jacket, rolling up his shirtsleeves, and searching through the mud for reusable nails were well behind him. He was now a man of wealth and status. And in that role, he would bring a different type of value to the stalled project.
Robert Olnick, a lawyer by trade, developed a plan with investment bankers to take over the Twin Pines project without having to put up the 10 percent equity stake—about $33 million—required to obtain the state loan. Working with Leonard Boxer, a young lawyer, Olnick decided to capitalize on recent tax law changes. They could raise the $33 million from wealthy people and then pass along to them the tax benefits of the biggest expenses—the cost of the buildings spread over time, known as depreciation, and interest on the loan. The apartment project would pay the costs, but through tax accounting magic allowed at the time, the IRS would allow the “investors” to reduce their taxable income by the same amount.
The state of New York approved the reformulated project at the end of July 1972, and the race to pull together the investors began. The investment was designed never to produce actual returns for the investors, only to shelter their other income from taxes. Lazard Freres, then one of the world’s most prominent investment banks, looked to solicit families so rich that sheltering their millions from taxes was more important than making additional millions. “They weren’t investing for gains,” remembered Robert Rosenberg, a former housing official hired to run the apartment project. “They were doing it basically for tax shelter.”
A dozen or so Lazard investment bankers put up almost 40 percent of the total needed. The remaining tax benefits went to fifteen of the wealthiest families in America. Malcom McLean, the inventor of shipping containers, put up $5 million. The heirs of General Motors cofounder Charles Stewart Mott bought in for $1.5 million. William S. Paley, who grew a small network of local radio stations into the CBS television network, signed on for $1 million.
One man invested more than any other: Fred Trump. He spent $5 million in his own name. And he recognized that he had already set up his grown children well enough—giving them eight buildings and the land under his biggest project—that they, too, would benefit from an expensive tax shelter. He invested another $1 million in the name of one company he had given to his children. It was an “investment” that put the Trumps in league with some of the wealthiest people in America.
Fred had purchased a minority share as a limited partner, with no input over construction or management. He could not even sell his stake without the approval of the general partners. Over the coming two decades, he would not collect a dime in profits from the project, now being called Starrett City, but the costs passed on to him through accounting magic would have wiped away his tax liability on $20 million of profits from his own businesses. It would do the same, on a smaller scale, for his wealthy grown children.
Donald Trump would take credit for his family’s investment in Starrett City, saying he had heard about it during a holiday party at a law firm in Manhattan and called his father. “It’s one of the best investments I ever made, and one of the first,” he would say decades later. The other tax shelter investors—including Ahmet M. Ertegun and Jerry Wexler, the cofounders of Atlantic Records and future inductees into the Rock & Roll Hall of Fame—kept their involvement secret for decades. They certainly did not offer their tax shelter as proof that they were prominent real estate developers.
Fred never challenged Donald’s claim of credit. And Donald would never acknowledge what spending millions of dollars on tax shelters said about his father’s wealth, or about his own status as a rich heir.
As the years passed, Donald would recast his work for his father in these early years, puffing up each event to make it sound like a monumental or magnanimous achievement. He would call the New Jersey senior-citizens building project “our philanthropic endeavor,” even though it had no charitable component. He would claim that he sold the Cincinnati project for $12 million, almost double the actual price of $6.75 million. He claimed that “we” had bought the Cincinnati project, and “we” straightened it out, all of which his father accomplished while he was in high school. The habit of Donald appropriating his father’s accomplishments and wealth to inflate his own image had only begun.
On January 28, 1973, the front page of The New York Times announced that the war in Vietnam had ended with the signing of a peace accord in Paris. A separate story discussed how the end of the military draft would ease the minds of millions of young American men.
Donald Trump, having escaped the draft, had no such concern. Also inside that day’s newspaper, on the front page of the Real Estate section, there appeared an article that could have served as a debutante’s introduction to New York real estate society. Under the headline a builder looks back—and moves forward, a photograph showed Donald and Fred Trump standing shoulder to shoulder on the roof of a building at Trump Village. Fred, looking all his sixty-seven years in a tall fedora hat and a polka-dot tie, stares blankly off to his left. At his right side, Donald gazes straight into the camera with a faint smirk, his blond hair draping over his collar and ears and dusting across his forehead.
The Trumps told the reporter that after decades of working in the boroughs, Fred Trump had made his first moves to build in Manhattan and was in the process of “buying a prime building site on the East Side for rental apartments.” The biggest change at the company in recent years, the article asserted, had been the addition of Donald as its president, after he had graduated first in his class from Wharton. Donald was described as the only one of Fred Trump’s five children to display an interest in real estate. It was Donald who offered evidence that the company was moving forward, including “our entry into the Manhattan field” and recently buying 20 percent of Starrett City. “It’s a rental investment,” he said. “We are by no means standing still.”
Not much of what Donald told the reporter was true. He had graduated without honors. His brother Freddy had displayed an interest in the business and been pushed aside by their father. His brother Robert worked in finance after graduating from Boston University, but would soon join the family business. The Trumps had not bought land on the East Side of Manhattan for an apartment building and would not do so that decade. Contrary to what Donald said, the Starrett City tax shelter represented standing still by definition, tying up capital in a way designed to not grow.
The claims, fueled by Donald’s drive, displayed a sharp demarcation from the way Fred had handled his affairs and image throughout his career. He had been the subject of hundreds of news articles over the decades. He could be immodest, grandiose even, describing his projects as patriotic. He alternated between advising working people to either buy or rent their homes in ways that could sound benevolent but inevitably tracked with whether he was currently selling or renting his latest project. But one would be hard-pressed to find a case in which Fred Trump said he was doing something that he was not, in fact, doing. This was a new day for the Trump name.
In these years, people in New York real estate noticed a difference in how Fred Trump acted toward his favorite son versus how other prominent real estate tycoons interacted with their heirs apparent. Richard Kahan, who worked in and around real estate development in the city for decades, remembered how Samuel J. LeFrak, a contemporary of Fred, would take credit for everything, regardless of the contribution of Richard, his son.
“Fred was the opposite, which is an explanation for why Donald ended up with a high level of confidence,” Kahan recalled. “Fred came up to me at dinners and would say, ‘Isn’t my Donny the greatest? Isn’t my Donny the smartest?’ He never pounded his own chest and said, ‘Look what I built.’ Never. It was a unique response coming from a real estate developer.”
Fred would never fully explain why he allowed his young, inexperienced son so much leeway to set the future course of his company. But he made his faith in Donald clear. “Everything he touches turns to gold,” Fred told the Times reporter in 1973, adding, “Donald is the smartest person I know.”
From that day forward, Donald would not only serve as the public face of the company his father had built but would mold the company’s direction by controlling the deployment of his father’s reputation and fortune. And turning everything to gold would not prove to be a requirement of retaining his father’s support.